U.S. Private Employers Add 86,000 Jobs in October, ADP Reports

U.S. private employers added 86,000 jobs in October, according to payroll processor ADP, extending September’s hiring gain but showing uneven demand across industries. Service businesses accounted for almost all of the increase, and professional and business services shed jobs for a third straight month.

The October gain matched September’s revised increase of 86,000. ADP had initially reported 90,000 jobs for September, so the latest release points to two months of hiring at essentially the same pace rather than a fresh acceleration. The figures were published Wednesday in the company’s National Employment Report, produced with the Stanford Digital Economy Lab.

The ADP National Employment Report draws on anonymized weekly payroll records covering more than 26 million U.S. private-sector workers. It is an independently produced measure of payroll employment, not the government’s official employment count. That distinction is important when assessing the October number ahead of the Labor Department’s report later this week.

Services drove the gains, with a sharp loss in business services

Service-providing companies added 82,000 positions, compared with just 4,000 in goods-producing industries. The largest increase came from trade, transportation and utilities, which together gained 39,000 jobs. Education and health services added another 28,000, keeping care-related employment among the principal sources of hiring in the private economy.

Leisure and hospitality businesses increased payrolls by 19,000, while financial activities added 15,000 and other services gained 10,000. The distribution indicates that October’s growth was not limited to one service category. It also shows why a positive national total does not necessarily mean every major industry is finding room to hire.

Professional and business services lost 27,000 jobs, the largest decline among the categories in ADP’s industry breakdown. ADP said employment in that sector had fallen for three consecutive months. Information businesses reported a smaller loss of 2,000 positions. Those declines offset part of the gains elsewhere and remain a weakness within an otherwise positive report.

Goods-producing hiring was modest and concentrated in construction. Construction employers added 13,000 jobs, but natural resources and mining lost 8,000 and manufacturing shed 1,000. With those losses factored in, the broad goods-producing group contributed only a small portion of the 86,000 national increase.

These industry figures describe changes in employment, not why companies made their staffing decisions. ADP did not establish a single cause for the losses in professional services or manufacturing. The more defensible reading is that payroll growth continued in October, with meaningful differences across the economy.

Employers of every size added jobs, led by the South

October’s increase was spread across ADP’s establishment-size groups. Medium-sized workplaces with 50 to 499 employees added 33,000 positions. Small establishments, those with fewer than 50 employees, added 28,000, and workplaces with at least 500 employees gained 24,000. The published categories are rounded, which is why their totals need not match the headline figure exactly.

Within the small-establishment category, businesses with one to 19 workers accounted for 21,000 jobs, compared with 7,000 at establishments employing 20 to 49 people. That detail matters because the broader small-business total was not evenly divided across its two groups. ADP’s categories classify establishments by workforce size; they should not automatically be read as a count of jobs created by entire corporations of the same size.

The South led the regional figures with 47,000 added positions. The West contributed 28,000, while the Midwest added 9,000 and the Northeast 3,000. Within the South, the West South Central division accounted for 35,000 of the increase. In the West, the Pacific division recorded a gain of 27,000.

Those regional numbers show where ADP measured net job creation, but they do not establish which industries were responsible for each area’s performance. A national increase in construction, for example, should not be assigned to the South simply because the region led overall hiring. The report’s regional and industry breakdowns describe different dimensions of the same employment estimate.

Job changers reported stronger growth in total earnings

ADP’s accompanying Pay Insights data showed median base pay for private-sector workers increasing 3.2% from a year earlier. Median gross pay grew 4.7%, a higher rate that reflects a broader measure of earnings than regular base pay alone. The difference is especially relevant when compensation comes through overtime, bonuses or additional hours rather than a higher underlying pay rate.

For workers who stayed with their employers, base pay rose 3.0% from a year earlier and gross pay increased 4.4%. Job changers recorded base-pay growth of 4.8% and gross-pay growth of 7.6%. The gap between those two measures was therefore more pronounced among people who changed employers than among those who remained in their jobs.

ADP chief economist Nela Richardson said the data suggested that job changers were being drawn by bonuses, overtime and more hours alongside higher base pay. She described their total earnings growth as the fastest since March 2024. That is ADP’s interpretation of its payroll observations, not proof that every worker changing jobs received those particular benefits.

The distinction between base and gross pay also limits how much can be inferred from the 7.6% figure. It should not be presented as the typical increase in an employee’s stated salary after switching jobs. ADP measures year-over-year changes in observed pay, and the gross-pay measure can reflect more work performed as well as changes in compensation.

Taken together, the pay results suggest that employment growth and earnings growth tell somewhat different stories. Payroll headcounts rose at a moderate pace, while the extra earnings reported for job changers were larger than their base-pay increases. Neither measure alone can show whether employers will maintain that pattern in the months ahead.

Friday’s government jobs report will provide a broader comparison

The latest ADP release arrives after several other indicators pointed to a labor market with ongoing hiring but limited momentum. The Bureau of Labor Statistics reported that total U.S. nonfarm payrolls rose by 29,000 in September and that the unemployment rate was little changed at 4.2%. Those figures came from the government’s establishment and household surveys, which differ in coverage and methodology from ADP’s payroll-based series.

A separate BLS report on job openings and labor turnover, released Tuesday, found 7.5 million openings in September. Employers made 5.4 million hires, and total separations were 5.3 million. Workers voluntarily quit 3.4 million jobs, while layoffs and discharges stood at 1.6 million. The figures provide context on hiring and turnover, rather than a second estimate of October’s payroll change.

The surveys can move differently because they measure different aspects of the workforce and rely on different samples. ADP focuses on private-sector payroll jobs, whereas the government’s monthly employment report also includes government employers and a household-based measure of unemployment. A one-month ADP gain is therefore not a direct forecast of the official payroll figure.

The Labor Department is scheduled to publish its October Employment Situation report on Friday, November 6, at 8:30 a.m. Eastern Time. Its payroll, unemployment and wage figures will provide the next check on whether the private-sector hiring reflected in ADP’s October release is consistent with the broader U.S. labor market.